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eXp Must Face Cover-Up Allegations in Sexual Assault Lawsuit, Judge Rules

A federal judge is allowing four women to move forward with civil claims that they were drugged and sexually assaulted by eXp recruiters at company events, ruling the alleged victims have “plausibly” contended that two high-profile influencers raped them—and that the company and CEO Glenn Sanford are culpable for failing to implement safeguards, as well as participating in a cover-up.

In an 85-page ruling, Judge Andre Birotte Jr. dismissed a some of the of the claims that eXp and Sanford acted negligently or caused emotional harm to the women, but allowed several more accusations—including that Sanford and the company violated federal sex trafficking laws as they ignored the assaults—to move forward.

“Plaintiffs have alleged that Sanford was on notice about the prevalence of illicit drug use and sexual assault at recruitment events, generally, and at the hands of (two recruiters), specifically, and he failed to take adequate steps when training Sponsor Agents to prevent its occurrence—despite eXp’s control over training and emphasis on recruiting,” Birotte Jr. wrote. “These allegations are sufficient to survive a…motion to dismiss.” 

In an emailed response to RISMedia, an eXp spokesperson continued to stress that agents affiliated with the company are not technically employees, and claimed that the womens’ complaints were “handled with speed, seriousness, and deep respect.”

“eXp hopes and trusts the court will give a full and fair hearing to the plaintiffs as they pursue claims against the individuals who allegedly assaulted them,” the spokesperson said. “However, the claims against eXp and its leadership have no basis in fact or law, and to which eXp vehemently denies. The court has dismissed some claims and we are prepared to present and defend our position on the others.”

Along with unearthing ugly and disturbing details around the mega-brokerage’s high-pressure recruiting culture, the lawsuit also brings up broader questions of liability and safeguards within the real estate space, and whether agents at eXp are actually employees (rather than independent contractors) based on the unique financial incentives to build “uplines” and “downlines” with other agents—and executives like Sanford.

According to the complaint filed by the four women, two high profile eXp influencers—David Golden and Michael Bjorkman—persuaded them to attend recruiting events between 2018 and 2020 with the implied promise of furthering their real estate careers. They claim that Golden and Bjorkman slipped drugs in their drinks and sexually assaulted them, and were known to have engaged in the same behavior in the past.

A third recruiter, Brent Gove, is also named as an accomplice, alleged to have covered for Bjorkman and Golden and for interfering in a criminal investigation into Bjorkman (which was dropped last year, without any charges filed).

The women reported the assaults by Bjorkman and Golden to eXp leadership, but say they were either ignored, asked to sign NDAs or gaslit about their experiences. Sanford knew both Bjorkman and Golden for decades, recruiting them from rival brokerage Keller Williams, where Sanford also worked for some years. 

The plaintiffs also have claimed that eXp allowed Bjorkman and Golden to continue financially benefiting from recruiting the alleged victims, even after the women reported the assaults and the men were separated from the company.

For its part, eXp has claimed it quickly removed Golden and Bjorkman when the allegations came to light, characterizing them as “bad actors” and defending how the complaints were handled.

Emails and voicemails left for Bjorkman, who continues to practice real estate in California, were not returned. Emails sent to lawyers representing Golden and Gove were also not returned.

Lawyers representing the plaintiffs have set up a website promoting the lawsuit, soliciting more victims to come forward and prominently characterizing eXp as a “pyramid” that contributes to the victimization of women.

They did not respond to detailed questions from RISMedia regarding the status of the lawsuit, and the elements of their case implicating the larger real estate industry.

A separate lawsuit with similar allegations was filed by another woman against Bjorkman, Golden, eXp and Sanford back in December.

Motive and liability

The allegations, which first came to light just over a year ago, prompted a New York Times investigation, an intervention by a state comptroller’s office and resulted in at least one more woman coming forward. They have also shone a dark and ugly light on eXp’s business model and company culture, which is heavily reliant on recruiting.

While the burden of proof at this point in the case is relatively low, Birotte wrote that plaintiffs had presented significant evidence that Sanford and eXp were aware of what was going on, and that both could be potentially liable for failing to take steps to protect the women and for attempting to silence them when they came forward—allegedly due to the large financial boon the recruiters brought to eXp.

“(The women) allege that (Sanford’s) role at eXp created a duty to act with reasonable care towards the agents in his downline (i.e., Plaintiffs), which he violated by recklessly subjecting them to alleged sexual predators and ignoring their allegations about those predators, all while financially benefitting (sic) and allowing the predators to benefit, as well,” Birotte wrote. “Absent an argument as to why these allegations do not sufficiently support Plaintiffs’ claims for negligence, Defendants fail to meet their burden on a motion for dismissal.”

An important and disputed  element of the case is whether Sanford and eXp are responsible for the behavior of independent contractors like Gove, Bjorkman and Golden, who are not technically employees. 

Birotte said that at least one of the claims failed to plausibly allege that kind of relationship under the relevant statutes, and that Sanford and eXp cannot be held liable for negligent hiring, retention and supervision in the case—though he also explicitly allowed plaintiffs to amend their arguments and continue to pursue that accusation.

“To the extent that Plaintiffs’ policy arguments are compelling, they are ultimately irrelevant,” Birotte wrote. “(Plaintiffs’ complaint) does not allege that Sanford delegated the duty he owed to Plaintiffs—whatever that duty was—to Golden and Bjorkman.”

On Feb. 28, plaintiffs re-filed their complaint and again alleged that Sanford and eXp effectively employed Bjorkman and Golden, noting that the company requires agents to use eXp branding in their marketing and communications, and further controls their efforts to recruit in service of company profit goals. Sanford should have known that the two were “were unfit to perform the work for which they were retained,” and “that this unfitness created a particular risk to others.”

The issue of responsibility, sexual harassment and independent contractor status remains a larger issue across the industry. Real estate agents are defined in IRS codes as independent contractors in most cases, and therefore are not protected by many laws and rules governing sexual harassment, retaliation and workplace misconduct.   

But Birotte said that eXp’s recruiting structure, in which agents share revenue and long-term “upline” and “downline” financial relationships, could complicate that designation, at least as it relates to the specific laws cited by the plaintiffs in this case, adding that those arguments would need to be fleshed out to pass muster. 

“The Court agrees that several aspects of eXp’s business model obfuscate the issue of an employment relationship,” he said. “These allegations are relevant to, though not sufficiently evident of, an employment relationship.”

“(Plaintiffs’) Complaint clearly demonstrates a multi-tiered structure of roles at eXp and raises questions as to whether all eXp real estate agents had the same employment relationship with Sanford,” he later concluded.

The trial in the case is scheduled to start Oct. 4 and last for two weeks. A status conference is scheduled for next Tuesday, March 4.

Editor’s note: This story was updated with new information from an amended court filing.

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